Capital spending by chip companies to fall

Silicon wafer - Wikimedia Commons -Hot on the heels of Intel’s quarterly results last night, Gartner issued a warning that worldwide capital spending on semiconductors is likely to fall by one percent this year.

Gartner said that in 2016, spending will decrease by 3.3 percent.

The reason, according to research VP Takashi Ogawa, is largely down in demand for electronics by people. And he said that next year, Gartner is expecting DRAM manufacturers to make “dramatic” reductions in their investment plans because there will be a glut of available chips.

Intel has again reduced its capital spending but the same will also be true for outsourcing companies including foundries, assembly companies, test companies and integrated device manufacturers.

But the NAND flash sector will escape the cuts because Gartner predicts that many manufacturers will move a lot of their investments from DRAM assembly.

DRAM manufacturers have already slowed investments this year, and will continue to do so in the first part of next year.